Beginners might be confused about which one to choose for their investment needs. Let’s discuss Litecoin, its features, reasons and ways to invest in Litecoin, things to consider and Litecoin’s future.
What is Litecoin?
Litecoin is one of the widely accepted cryptocurrencies in the world. Litecoin is a P2P (peer-to-peer) cryptocurrency network and an open-source project that extends Bitcoin’s original technology. It is a Bitcoin fork, which means that it uses the Bitcoin source code as the basis. Litecoin crypto is similar to Bitcoin in that it has improved transaction times. Litecoin was formally launched on 13 October 2011 by Google software engineer Charlie Lee. Today, it is still one of the fifteen largest cryptocurrencies in the world. Let us take a detailed look at why it is still one of the best places to invest in cryptocurrency.
Why should I invest in Litecoin?
Litecoin (LTC) is one of the most prestigious coins in existence, was developed to address the weaknesses of Bitcoin.
- Faster Transactions & Block Generations: Transactions on the Litecoin network are much faster than on the Bitcoin network, with an average of 2.5 minutes compared to 10 minutes on the Bitcoin network.
- Scrypt-Hashing Algorithm: Litecoin uses a special algorithm known as scrypt-hashing. The algorithm makes mining Litecoin easier as anyone with a simple computer can mine it.
- Lower Costs: Since the blockchain works simple and has a lower block processing time, the cost of transactions is also low.
- Open Project: Litecoin is built on an open-source blockchain, making it versatile as developers can add features, adjust them, and add security patches with time.
How can I invest in Litecoin?
Cryptocurrency Exchanges: If you want to invest in Litecoin, you need to buy this cryptocurrency. You can do so on cryptocurrency exchanges. You can check out the list of the best ones to choose from. Just create an account on an exchange. Once you create an account, you can choose your fiat currencies to buy Litecoin, exchange an existing cryptocurrency for Litecoin. After that, there are several ways of making money with Litecoin. Let us see what they are.
How to invest in Litecoin and make money
Litecoin has been in the game as a key player for a long time compared to other cryptocurrencies and has served investors well.
- Trading: You can buy Litecoin on any cryptocurrency exchange. These also allow you to participate in day trading to buy/sell your Litecoin at a profit.
- Investing: One of the easiest way to invest in Litecoin is to buy Litecoin and hold on to it. You can sell your Litecoin when its market value increases, netting a profit. Investing is a long-term process, so patience is required.
- Crypto-Mining: You can use your computer to add transactional records and verify blocks on the blockchain to earn Litecoin. Litecoin miners are rewarded 12.5 new Litecoins per block.
- Staking: You can stake your Litecoin to earn rewards. Staking is the mechanism of locking some of your cryptocurrency to the blockchain network.
- Lending: You can also lend the Litecoin you have. Several cryptocurrency exchanges allow you to lend your Litecoin and earn interest.
Can I lose all my money in Litecoin?
Yes, some ways can result in you losing all your Litecoin. Let us take a look at the ways this can happen.
- Amateur Trading: Beginners can get carried away and lose their Litecoin if they trade it without proper knowledge. It is advised to gain some insight before starting day trading.
- Cybercrimes and Hacks: Hacks and Cybercrimes pose major threats in the world of cryptocurrency. Online exchanges are not 100% protected from hacks which is why you should never keep your Litecoin there. Always keep your Litecoin safe in a private crypto wallet as it makes a smaller target.
- Frauds and Ponzi Schemes: Your personal information might be available to fraudsters who can contact you, offering Ponzi schemes that offer a low-risk, high-reward opportunity and scam you out of your Litecoin. Never accept calls or schemes from strangers and avoid random phishing emails and messages.
- Password Loss: All you Litecoin is stored online, either on exchanges or on wallets. These are often password protected. You can also lose access to your Litecoin if you forget your password.
Risks of investing in Litecoin
There are a ton of cryptocurrencies in the world today, with new ones being added. However, you need to look at the risks as well before investing in any crypto asset. Following are the risks that may be associated with investing in Litecoin –
- Volatility: All Cryptocurrency, including Litecoin, are extremely volatile. Cryptocurrency markets are infamous for wild rifts in the price of cryptocurrencies. Litecoin may experience a sudden downfall in its value, just as much a spike.
- Acceptance: Litecoin might be more valuable than fiat currencies (normal currencies), but it is still an asset. The world has not caught up to regular usage and acceptance of crypto, so owning Litecoin is risky.
- Not Regulated: Litecoin, like most cryptocurrencies, is not regulated by any government agency or central bank.
Things to consider before investing in Litecoin
Litecoin has been in the market as an alternative to bitcoin since 2011. Investors are highly involved in it because of its high potential.
- Wide Availability: Litecoin has been a market player for nearly a decade and is one of the most established cryptocurrencies. Litecoin is available and supported on almost all major exchanges.
- Charles Lee Factor: Litecoin was founded by Charles Lee, a former Google Software Engineer who has now left Litecoin. He sold his shares and parted from Litecoin in December of 2017 to avoid a conflict of interest.
- Limited Litecoins: Litecoin is a limited cryptocurrency, which means that there can never be more than 84 million Litecoins in circulation. This makes Litecoin more valuable than competitive cryptocurrencies that are unlimited and keep growing.
Litecoin was one of the first to come onto the market and is currently the 15th largest cryptocurrency in the world. This is in terms of market capitalization and has a value of $174.07 (At the time of writing). A short-term Finder survey found that the average Litecoin price forecast will be $26,643 by December 2021 based on a survey of 42 fintech specialists in cryptocurrency. All this goes on to say that Litecoin is going to pay off and is a cryptocurrency worth investing in.